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Posts Tagged ‘Bitcoin’

Bitcoin is over $9,000

Well, it’s over $9,000.

Even as you recoup from attempting to explain Bitcoin to your family over the Thanksgiving dinner table, the value of the cryptocurrency is growing at an increasingly hefty pace. As of the time of this writing, the value of a single Bitcoin was above $9,143, climbing nearly 6 points in the past 24 hours.

At a certain point, news of clearing these incremental price hurdles are going to get old, but given the increasing speed in which Bitcoin prices are knocking through these barriers and hitting all-time-highs, it seems relevant to chronicle the march towards $10,000 at least.

The cryptocurrency currently has a market cap north of $152 billion.

via coinmarketcap.com

My colleague Fitz Tepper said the case for Bitcoin at $10k was pretty strong by year’s end when it hit $8,000 just six days ago, but at this rate perhaps its more relevant to wonder how close to $15k the cryptocurrency will get in 2017 before the rate of investment at least cools.

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How bitcoin, blockchain and cryptocurrencies can be a safe haven in times of crisis

What is your safe haven? What precautions do you have in place for that “Oh, my goodness” time where you need some protection?

Safe havens are needed in several areas of life. One is your home and the shelter you have in times of dangerous weather. In the Midwest, where I grew up, tornadoes were common, and it was normal to have a cellar or basement stocked with supplies for the family for a few days.

Financial planners advise their clients to have a safety fund for times of emergency. This would include a few months of living expenses, the proper types of insurance, some cash on hand in case ATMs are inoperable, and more.

I like a site called Organize-You.com that gives checklists and guides on essential documents and preparation steps to take for wills, health-related matters and more. Economist Mary Kelly, Ph.D., a professor at the United States Air Force Academy, has put together a valuable checklist that you will want to see.

People in countries like Venezuela, Cyprus, Poland, Argentina and others are vividly aware that their money in the bank is not completely safe. Those funds in the bank can be, and have been, confiscated by governments when a time of crisis comes.

You think it couldn’t happen in the USA? I remind you about Executive Order #6102, when President Franklin Delano Roosevelt made it illegal to own gold in the United States. Those who did not turn in their gold were arrested by the Secret Service. Yes, it can (and did) happen in the USA.

A safe haven

A popular safe haven today for many is cryptocurrencies related to blockchain. In countries like Venezuela, people are losing their currency (the Bolivar) to inflation. Many are using bitcoin and other cryptocurrencies to have a safe haven in times of food shortages, riots and destruction. Those who had savings in bitcoin were able to survive the “bail in” when banks confiscated their funds in Cyprus in 2013.

We’ve seen an increased acceptance of cryptocurrencies this year as never before. More than 200,000 retail stores in Japan are accepting bitcoin for payment. Countries like Russia, China, Australia, Canada, England and others are studying cryptocurrencies and blockchain to determine the best way to blend that technology into their system.

Blockchain is not only accepted around the world, but many people also see it and cryptocurrencies as safe havens. There is no doubt that blockchains and bitcoin are important factors today and can help you with your safe haven planning.

You don’t want all of your portfolio in cryptocurrencies by any stretch of the imagination. However, since cryptocurrencies have been much more mainstream and are accepted worldwide, it is a good idea to explore the possibilities. Check with your financial adviser about having at least a small amount of your safe haven resources in cryptocurrencies.

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RAOUL PAL: Bitcoin Is Worth $1,000,000

Raoul PalReal Vision Television Raoul Pal

“I did some analysis a while ago,” Raoul Pal said. “[It] was to try and create a valuation framework that gives some value to bitcoin because nobody really knows that it’s worth.”

Pal, a former global macro fund manager and current author of the Global Macro Investor newsletter, is talking about the bizarre digital cryptocurrency that saw its value surge north of $1,200 a year ago.

“So I said OK well let’s assume it’s something like gold—There’s a finite amount of it,” Pal said in an interview with Grant Williams on Real Vision Television. “There’s a finite amount that’s been mined. The rest is underground. We kind of know how long it’s going to take before all the gold is mined or before all the bitcoins. Put them in the same kind of equation we get a value of bitcoin and that value is a million dollars. Now, you’ll never hear an analyst say this—but I don’t mind this—I could be wrong by 90%, and it’s still worth $100,000.”

At the time of the interview, bitcoin was trading around $650. Right now, it’s at around $364.

Bitcoin chartCoin DeskHere’s how bitcoin has traded since July 2010.

One concern people have about bitcoin is the volatility in price swings. Pal said the volatility is fine. He thinks that the upside is “astronomical” compared to the downside.

Right now, bitcoin is still in its infancy and it’s not going to go away because of the amount of people behind it.

Pal expects central banks will have to regulate bitcoin over time, but that’s not a problem.

“What they can’t do is destroy it and that’s why bitcoin becomes incredibly interesting,” he said.

Even though he has a high valuation, Pal doesn’t recommend that people put their entire life savings in bitcoin. He suggested treating it like an option contract.

Buying bitcoin is something Pal strongly believes in, especially because he thinks we are at risk of losing faith in money. He worries about the consequences of central banks are printing too much of it. There’s an unfavorable perception that they’re “rigging” the system by keeping rates low and buying the bond market.

His suggestion is to avoid the bond market.

Pal also thinks that people should be careful about how they own their gold. Because of the proliferation of derivatives and ETFs, gold is just the collateral to a highly-leveraged “monster.” He thinks that it’s best to buy physically unencumbered gold instead of paper gold.

Watch the full Real Vision Television interview below:

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